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Tick, tick, tick. The doomsday clock for Tether just moved closer to midnight. When Tether finally depegs, all the exchanges will go under (except maybe Coinbas

Tick, tick, tick. The doomsday clock for Tether just moved closer to midnight. When Tether finally depegs, all the exchanges will go under (except maybe Coinbase and a few others that are tightly regulated). Coinbase will probably still go bankrupt because the crypto trading market is going to evaporate. The value of most coins will go to zero. There will be a liquidity crisis the likes of which we haven't seen since the 19th century.

prox 4y ago
Who knew if you made an unregulated market full of sharks that you would get this outcome? /s [0] 0 : https://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929 https://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929
sroussey 4y ago
I wonder: what will be the last straw that breaks confidence in Tether?
- Animats 4y ago
  Something is happening in stablecoins.[1] Binance and OKX exchanges "temporarily suspended" support for USDC and USDT on the Solana blockchain. Unclear why. [1] https://www.coindesk.com/markets/2022/11/17/crypto-exchanges-binance-and-okx-suspend-support-for-solana-versions-of-usdt-usdc-stablecoins/ https://www.coindesk.com/markets/2022/11/17/crypto-exchanges...
  - gruez 4y ago
    But that's in the wrong direction? They're suspending deposits, not withdraws.
    - Animats 4y ago
      Maybe they don't want to be holding those "stablecoins". If you withdraw USDT or USDC, it's off their books and they have no further risk. If you deposit it, and it's credited as US dollars...
  - renonce 4y ago
    Solana ecosystem is largely supported by Alameda which we all know went bankrupt. And furthermore Solana network is not quite stable, its validators are costly to operate and it has been down many times so maybe exchanges are losing confidence in the network's reliability.
- polygamous_bat 4y ago
  Tether will keep pretending to be fine until every last real dollar behind it has been drained. This is what is happening right now, with Binance (and previously FTX) propping up the crypto market with their purported bailouts and pretending nothing is out of place. Then one morning, all of a sudden, it will all come down with some really spectacular fireworks to watch.
  - Animats 4y ago
    > Tether will keep pretending to be fine until every last real dollar behind it has been drained. That's how stablecoins work. There are two stable points: 1 and 0. When they break, they go all the way. As soon as the price breaks, there's a rush to exit. We've seen this happen a few times now. Watch the Tether market cap decline here.[1] A billion here, a billion there, and sooner or later you're talking about real money. [1] https://coinmarketcap.com/currencies/tether/ https://coinmarketcap.com/currencies/tether/
lizknope 4y ago
People need to actually redeem the tethers for actual US dollars in order to collapse the tether scam. I think all the crypto exchange collapses and bankruptcy declarations will actually help tether. All the money will be locked up for years as the lawyers and accountants go through everything. The Mt Gox "hack" was in 2014 and people have still not gotten money back yet. That is 8 years and counting.
- IfOnlyYouKnew 4y ago
  The redemption of tether (and other) can happen a long time before any payments to creditors happen.
  - JeremyNT 4y ago
    But the only thing that matters so far is Tether's market cap... which has barely moved through the latest shitshow. Whoever buys tether (and who is it? really? I don't think it's retail investors...) doesn't seem to be in a hurry to convert it to cash. I'm assuming it's mostly or all related to criminal activity, so they can't actually cash out?
- skybrian 4y ago
  Why do you think that bankruptcy courts wouldn't order the Tether to be sold long before they figure out how to reimburse the creditors?
  - Bootvis 4y ago
    What makes you think they would do so quickly? Also, selling to quickly would at least temporarily depeg Tether and cost the creditors money.
    - skybrian 4y ago
      Presumably they'd try to sell it at some rate wouldn't depeg Tether, and the reason to do so is to preserve cash for the creditors in case Tether depegs for some other reason.
baobabKoodaa 4y ago
> The value of most coins will go to zero. By absolute number, sure, but if you count "most" by weighting them with trading volume, then no. Bitcoin and Ether will not go to zero.
- IncRnd 4y ago
  > By absolute number, sure, but if you count "most" by weighting them with trading volume, then no. That's crypto-speak for how to deny reality. If the value of a USD dollar plummeted to $0.01, you don't pull out your wallet and say, "I have 100 of them, so no the value hasn't gone to almost nothing."
  - stickfigure 4y ago
    To use your analogy: Parent's point is that even if all the quetzals and colones and cordobas and lempiras go to zero, the USD will still have value.
    - baobabKoodaa 4y ago
      Exactly!
    - hakfoo 4y ago
      The dollar holds value in tough economic times because it's the exit-channel for a lot of sketchier assets. You sell your quetzales and lempiras (or iffy stocks and bonds) when the market starts to tremble to get back to relatively reliable dollars. When crypto implodes, what are people going to drop their shitcoins for? I could see a few possible answers: * They'll accept BTC or Ether because it's what they can easily get to in a pure-crypto market. If there's enough turmoil, major fiat offramps may be overburdened. * They'll pile onto stablecoins (likely because exchanges present it a default way out, and sure, they'll exchange for dollars some day) running the risk of triggering further contagion to stablecoins themselves. * They'll take fiat at increasingly terrible exchange rates just to get out of the dumpster fire.
  - baobabKoodaa 4y ago
lanewinfield 4y ago
Thankfully we'll always have USDTea. https://usdtea.io https://usdtea.io
- ben_w 4y ago
  I think we all need a bit of stabilitea in the modern world. Good thing it's iced tea though; as we all know, proper tea is theft.
- eternalban 4y ago
  Wasn't sure about the peg to a soft drink but the whitepaper sold me.
BeFlatXIII 4y ago
You have my hopes up. Let's hope your prediction is the lower bound.
Ferret7446 4y ago
> When Tether finally depegs, all the exchanges will go under Why? Exchanges have existed before stablecoins, and you can still trade BTC et al without ever touching a stablecoin.

prox 4y ago

Who knew if you made an unregulated market full of sharks that you would get this outcome? /s [0] 0 : https://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929 https://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929

sroussey 4y ago

I wonder: what will be the last straw that breaks confidence in Tether?

Animats 4y ago
Something is happening in stablecoins.[1] Binance and OKX exchanges "temporarily suspended" support for USDC and USDT on the Solana blockchain. Unclear why. [1] https://www.coindesk.com/markets/2022/11/17/crypto-exchanges-binance-and-okx-suspend-support-for-solana-versions-of-usdt-usdc-stablecoins/ https://www.coindesk.com/markets/2022/11/17/crypto-exchanges...
- gruez 4y ago
  But that's in the wrong direction? They're suspending deposits, not withdraws.
  - Animats 4y ago
    Maybe they don't want to be holding those "stablecoins". If you withdraw USDT or USDC, it's off their books and they have no further risk. If you deposit it, and it's credited as US dollars...
- renonce 4y ago
  Solana ecosystem is largely supported by Alameda which we all know went bankrupt. And furthermore Solana network is not quite stable, its validators are costly to operate and it has been down many times so maybe exchanges are losing confidence in the network's reliability.
polygamous_bat 4y ago
Tether will keep pretending to be fine until every last real dollar behind it has been drained. This is what is happening right now, with Binance (and previously FTX) propping up the crypto market with their purported bailouts and pretending nothing is out of place. Then one morning, all of a sudden, it will all come down with some really spectacular fireworks to watch.
- Animats 4y ago
  > Tether will keep pretending to be fine until every last real dollar behind it has been drained. That's how stablecoins work. There are two stable points: 1 and 0. When they break, they go all the way. As soon as the price breaks, there's a rush to exit. We've seen this happen a few times now. Watch the Tether market cap decline here.[1] A billion here, a billion there, and sooner or later you're talking about real money. [1] https://coinmarketcap.com/currencies/tether/ https://coinmarketcap.com/currencies/tether/

lizknope 4y ago

People need to actually redeem the tethers for actual US dollars in order to collapse the tether scam. I think all the crypto exchange collapses and bankruptcy declarations will actually help tether. All the money will be locked up for years as the lawyers and accountants go through everything. The Mt Gox "hack" was in 2014 and people have still not gotten money back yet. That is 8 years and counting.

IfOnlyYouKnew 4y ago
The redemption of tether (and other) can happen a long time before any payments to creditors happen.
- JeremyNT 4y ago
  But the only thing that matters so far is Tether's market cap... which has barely moved through the latest shitshow. Whoever buys tether (and who is it? really? I don't think it's retail investors...) doesn't seem to be in a hurry to convert it to cash. I'm assuming it's mostly or all related to criminal activity, so they can't actually cash out?
skybrian 4y ago
Why do you think that bankruptcy courts wouldn't order the Tether to be sold long before they figure out how to reimburse the creditors?
- Bootvis 4y ago
  What makes you think they would do so quickly? Also, selling to quickly would at least temporarily depeg Tether and cost the creditors money.
  - skybrian 4y ago
    Presumably they'd try to sell it at some rate wouldn't depeg Tether, and the reason to do so is to preserve cash for the creditors in case Tether depegs for some other reason.

baobabKoodaa 4y ago

> The value of most coins will go to zero. By absolute number, sure, but if you count "most" by weighting them with trading volume, then no. Bitcoin and Ether will not go to zero.

IncRnd 4y ago
> By absolute number, sure, but if you count "most" by weighting them with trading volume, then no. That's crypto-speak for how to deny reality. If the value of a USD dollar plummeted to $0.01, you don't pull out your wallet and say, "I have 100 of them, so no the value hasn't gone to almost nothing."
- stickfigure 4y ago
  To use your analogy: Parent's point is that even if all the quetzals and colones and cordobas and lempiras go to zero, the USD will still have value.
  - baobabKoodaa 4y ago
    Exactly!
  - hakfoo 4y ago
    The dollar holds value in tough economic times because it's the exit-channel for a lot of sketchier assets. You sell your quetzales and lempiras (or iffy stocks and bonds) when the market starts to tremble to get back to relatively reliable dollars. When crypto implodes, what are people going to drop their shitcoins for? I could see a few possible answers: * They'll accept BTC or Ether because it's what they can easily get to in a pure-crypto market. If there's enough turmoil, major fiat offramps may be overburdened. * They'll pile onto stablecoins (likely because exchanges present it a default way out, and sure, they'll exchange for dollars some day) running the risk of triggering further contagion to stablecoins themselves. * They'll take fiat at increasingly terrible exchange rates just to get out of the dumpster fire.
- baobabKoodaa 4y ago

lanewinfield 4y ago

Thankfully we'll always have USDTea. https://usdtea.io https://usdtea.io

ben_w 4y ago
I think we all need a bit of stabilitea in the modern world. Good thing it's iced tea though; as we all know, proper tea is theft.
eternalban 4y ago
Wasn't sure about the peg to a soft drink but the whitepaper sold me.

BeFlatXIII 4y ago

You have my hopes up. Let's hope your prediction is the lower bound.

Ferret7446 4y ago

> When Tether finally depegs, all the exchanges will go under Why? Exchanges have existed before stablecoins, and you can still trade BTC et al without ever touching a stablecoin.